Drone company Lily is being sued, shutting down

January 17, 2017

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Lily burst onto the scene in 2015 with the promise of delivering a drone that would follow and film its user enjoying various activities like skiing, hiking or kayaking. The promo video looked spectacular, featuring a smiling drone and breathtaking aerial shots. Fueled by great marketing material, interest in the Lily Drone took off, with the company recording $34 million in pre-orders (representing 60,000 units) by the end of 2015. Lily even went on to score a $102 million valuation with a $14 million VC round that year.

It now appears the company was mostly marketing. Lily sent an email late last week to its pre-order customers informing them that, because of troubles securing financing which would've enabled them to “unlock their manufacturing line,” the company is closing shop and issuing refunds. While the shutdown may seem sudden for a startup doing so well, clues were left throughout 2016, such as a perpetually postponed shipping deadline.

But the bad news doesn’t stop there. San Francisco’s District Attorney has filed a lawsuit against the company, alleging it partook in false advertising and unfair business practices, per TechCrunch. A part of the suit is in reference to the much-watched marketing video, which didn’t actually feature a functioning Lily Drone, but rather a competitor’s product.